President Donald Trump signed a $900 billion Covid 19 relief bill into law, averting a government shutdown and extending unemployment benefits to millions of Americans. The signing came days after Trump suggested he would veto the legislation, demanding $2,000 direct payments to Americans, instead of $600.
Most of the bluster neither drastically changed to outlook for stocks, as markets still expected (and eventually received) stimulus of a minimum of $900 billion to pass, wrote Tom Essaye, founding father of The Sevens Report.
The five pillars of the rally (Federal stimulus, FOMC stimulus, vaccine rollout, divided government and no double dip recession) re main largely in place, and until that changes, the moderate and longer term perspective for stocks will be positive, Essaye added.
Apple led the Dow higher, rising 2.5 %. Tech and materials were the best performing sectors in the S&P 500, gaining 0.9 % as well as 0.8 %, respectively.
Wall Street is actually coming off a quiet holiday week wherein the main averages were flat. The S&P 500 fell 0.2 % last week as some investors got the chips off into the year-end. The 30 stock Dow eked out a 0.1 % gain for the same period.
Profit-taking might ramp up in the last week of the season, which has up to this point seen astonishingly strong returns. The S&P 500 has gotten 15.4 % year to date, even though the Dow has climbed 6.4 %. The Nasdaq has soared 43.2 % this season as investors favored high growth technology labels during the continued Covid-19 pandemic.
Dr. Anthony Fauci warned on Sunday that the united states may see a surge in new Covid-19 infections after Christmas and New Year’s celebrations. Two vaccines by Moderna and Pfizer have started the distribution process this month. And so much more than one million folks in the U.S. are vaccinated.